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Where Does Colorado Cannabis Tax Money Go?

Colorado Cannabis & The Federal Tax Code

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Colorado state tax revenue from the legal cannabis industry surpassed $2 billion in January and the state has collected more than $88.7 million in fees.

In addition to state and local taxes and fees, cannabis businesses have an effective federal tax rate of about 70% – compared to about 26% for other businesses. 

Did you know Colorado legal cannabis dispensary owners are unable to deduct normal business expenses like payroll and rent from their federal income taxes?

Marijuana has contributed over $320 Million dollars to Building Excellent Schools Today (B.E.S.T.), making up about 25% of the program's entire budget.

In FY 21-22 alone, nearly $15.3 million in state cannabis dollars went to state Affordable Housing Grant and Loans.

The Marijuana Tax Cash Fund collected $188.8 Million in FY 2021-22 alone.

In FY 21-22 alone, nearly $15 million in cannabis dollars went to the School Health Professional Grant program. 

More than $15 million in cannabis dollars went to substance abuse treatment in FY 21-22.

More than $1.6 million cannabis dollars went to the Tony Grampsas Youth Services Program in FY 21-22.

Voters in 59 of 64 Colorado counties voted no on Proposition 119 sending a clear message against raising taxes on cannabis consumers.

Unlike other legalized substances, the marijuana industry has a 97% compliance rate for unauthorized sales.

Unlike alcohol, research has proven you can only get “so high.” Cannabinoid receptors in your brain eventually prevent the body from getting further intoxicated.

Did you know? Since legalization in 2005, teen use in Colorado has remained flat and is below the national average.

According to a recent poll by the Pew Research Center, more than 90% of Americans think cannabis use should be legal.

Did you know? MIG represents more than 400 cannabis business licenses across the state.

A 2021 study found that medical cannabis use was associated with clinical improvements in pain, function, and quality of life with reductions in prescription drug use. 

Founded in 2010, MIG is the oldest and largest trade association for licensed cannabis businesses.

Colorado’s marijuana model has become the example for all other regulated cannabis states, and MIG works directly with policy makers to ensure that Colorado’s program is fair, tightly regulated, safe, and successful.

Safe Sales: Every marijuana sale in CO takes place on camera and requires multiple ID checks.

All regulated marijuana in Colorado is tracked from “seed to sale,” with oversight from the Marijuana Enforcement Division.

Established in 2010, MIG has led legislation for child resistant packaging, customer safety resources, and purchase restrictions for 18-20 year olds.

Marijuana is taxed at both state and local levels. This year Aurora built a new $34 Million dollar rec center, fully funded by local marijuana taxes.

The marijuana industry suffers from unfair Federal tax rules, which means that MIG members’ effective tax rates are around 71%.

A 2019 study showed that crime does not increase with legalization.

Conditions for medical marijuana

Cancer - Glaucoma - HIV or AIDS - Cachexia - Persistent muscle spasms - Seizures - Severe nausea - Any condition for which a physician could prescribe an opioid - Autism Spectrum Disorder - Severe pain - PTSD

Most marijuana businesses have access to banks, but because marijuana is still federally illegal, businesses are unable to access merchant processing services such as VISA or Mastercard.

Consuming higher potency marijuana does not lead to higher levels of impairment.
-- Journal of the American Medical Association (JAMA) 2020

71% of Colorado voters favor marijuana legalization. This has increased 10 points in the last four years alone.

The Marijuana Industry Group celebrates DEA marijuana rescheduling announcement

MIG Press Release

DATE: 04.30.24
CONTACT: Truman Bradley

The Marijuana Industry Group celebrates DEA marijuana rescheduling announcement

The Marijuana Industry Group (MIG) is delighted to hear that the Drug Enforcement Agency (DEA) is planning to reclassify marijuana (from Schedule I) to a Schedule III controlled substance. Schedule I substances are the most restrictive category and have been defined as having “no medical benefit” and “a high propensity for abuse.” Anyone familiar with the plant knows that both statements are false.

While today’s DEA announcement is not rescheduling itself, it is a massive step forward,” – Truman Bradley, Executive Director of MIG.  “It never made sense for marijuana to be treated the same as heroin. Marijuana has clear medical benefits and numerous studies have shown that marijuana is not prone to abuse. In addition to opening up marijuana for increased scientific research, this announcement continues the destigmatization of a plant that has done so much good for so many people.”

Rescheduling to III has the added benefit of removing an unfair and brutal IRS tax on state legal marijuana small businesses, who have been taxed at an effective rate above 70%. “Now the IRS will be forced to treat us like any other state legal business,” said Tiffany Goldman, Board Chair of MIG. “For too long, our companies have been taxed on items that normal businesses can deduct, such as cost of living increases and paid time off for employees. The days of the IRS targeting our industry are coming to an end. This also means that marijuana small businesses have a chance to actually be profitable.

MIG is hopeful that rescheduling will ease financial challenges. Capital markets are already responding positively. This will allow small business owners to make investments, create new jobs, and participate in the American dream. MIG also hopes that rescheduling will encourage Congress to pass 
SAFER bankingAround nine-in-ten Americans say marijuana should be legal for medical or recreational use.

Rescheduling is a giant first step, but some MIG members have concerns. Schedule III does not align with state legal programs. “Traditionally, Schedule III has been the purview of Big Pharma,” said Bradley. “We want to make sure that both medical and recreational cannabis remain accessible and that the Federal government recognizes state legal models. No one wants to buy marijuana from a pharmacy. The ultimate goal is full Federal legalization, but today’s announcement is, unquestionably, great news.”


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